Melissa Chan from Al Jazeera has yet another great piece up on her blog– this one about Ordos, a city that exemplifies the weirdness of the housing market here:

We had discovered Ordos by accident. Our team was in the area filming a report on the environment when we learned the city was nearby. I had heard about “Ordos 100”, a residential building project that had invited 100 globally renowned architects to design 100 homes for the city. It would be a fun detour.

We imagined wealthy residents, made rich over the past decade from the region’s mining boom, living in homes created by the Ordos 100 project. But instead, we found ourselves arriving at Ordos in the evening, checking into the only hotel we could find – a fancy one, encased in marble whose staff looked perplexed to see us.

We were the only guests there for the night. In the morning, we drove past streets of empty, but beautiful buildings. Never mind Ordos 100 – we never found it. City centre had us spellbound, and wondering if officials had watched that film classic, Field of Dreams.

Others who later visited Ordos, including economist Ting Lu of Bank of America-Merrill Lynch, pointed out that the real estate was not sitting idle, but had all been sold. So while the city lacked human beings, it was certainly supplying this odd demand from Chinese purchasers for empty apartments.

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Inflation hit a three-year high this past July at 6.5 per cent, meaning that wherever Chinese store their savings, it had better yield something that can keep up with the rate of inflation.

The stock market is no longer a popular choice for many ordinary citizens, who find it too unpredictable. That really only leaves property to dump your money.

Ordos is one oversized, inefficient bank vault.

And when we decided to check in after two years to see how “Bank of Ordos” was doing, we found a surprise: construction is still happening at a fierce pace.

Ordos now boasts Asia’s largest fountain show. Its theatre has managed to hold a few concerts this year. There are definitely more signs of life than the last time around – but still comparatively little relative to the size of the city. We came to realise just how little when our team got thirsty midway through our shoot and decided to buy water.

We ended up spinning around and around city blocks, searching for a store selling water. Eventually we found sine – but not without the feeling we had gone on a treasure hunt. There is no major supermarket in Ordos, because not enough people live in the city.

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As it turned out, while no real-estate sales offices in Ordos really wanted to talk to us, we were told off camera that apartment units up for sale in the secondary market were not getting offers. And, as we poked around apartment buildings in Ordos, we noticed broken windows and cracked paint on the exteriors, suggesting that building managers were not too fussed about keeping the place spiffy.

A wander into the buildings themselves showed dusty hallways and vacant apartment units. Some apartments were clearly halfway through interior decorating when work stopped, presumably because the owners decided, quite practically, that since they were not going to live in the unit, why bother?

People rebut stories like this by talking about how many people in China still live in tiny shacks in the countryside, or caves in the dusty north. There’ll always be demand for housing, right?

But if it’s housing like this, that cave-dwellers will never be able to afford, then doesn’t that defeat the whole purpose? What is the inherent value of a concrete cube you can’t actually sell to anyone? And if you end up having to dramatically slash the price down to a tiny fraction of what it is now just to attract a renter, then haven’t you essentially lost your entire investment? Especially given how poorly these places have been constructed and the short lifespan they’ll presumably enjoy, I don’t see how this can continue without a crash some day.